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IT warms up China's Indian stance

Technology (general)

(CNN) -- After years of competition, the world's two most populous countries -- China and India -- are starting to embrace cooperation.

At the heart of this warmer business relationship is the melding of Indian software and Chinese hardware -- or what some analysts have described as "laboratory of the world meets factory of the world".

The new mood of business cooperation between the two Asian giants was in evidence when Chinese Premier Wen Jiabao chose to arrive in India in early April via the Information Technology city of Bangalore, where he met the heads of such flagship Indian IT companies as Infosys, Wipro and TCS.

During his visit, Wen said China and India should work together to lead the world in information technology.

"I strongly believe that if we join hands together, we will certainly be able to set a new trail in the IT business world. When the particular day comes, it will signify the coming of the Asian century of the IT industry," Wen told a gathering of IT industry professionals in Bangalore.

"Cooperation is just like two pagodas -- one hardware and one software," Wen said. "Combined, we can take the leadership position in the world."

IT cooperation is just one part of the new business equation between Beijing and New Delhi. In other high-tech sectors such as pharmaceuticals and biotech, there are also joint venture prospects. All told, bilateral trade has doubled in the past year to about an annual figure of $14 billion, with India dramatically lifting its iron and steel exports to meet China's huge demand.

China and India also want to look at developing a free trade area that, with a combined population of 2.3 billion, would be the the largest in the world.

Along with business, China and India have also made strides in settling their long-running border dispute that saw them fight a brief but bitter war in 1962.

Under an agreement signed in New Delhi on April 11 between Wen and Indian Prime Minister Manmohan Singh, the two countries said they would establish "an India-China strategic and cooperative partnership for peace and prosperity."

Under the agreement, China has recognized the Himalayan territory of Sikkim as a part of India. Sikkim, between Nepal and Bhutan, was annexed by India in 1975.

There are still outstanding border issues in the Kashmir region and in India's northeastern state of Arunachal Pradesh, bordering China's Tibet region.

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